nep-env New Economics Papers
on Environmental Economics
Issue of 2015‒02‒05
39 papers chosen by
Francisco S. Ramos
Universidade Federal de Pernambuco

  1. Offset carbon emissions or pay a price premium for avoiding them? A cross-country analysis of motives for climate protection activities By Claudia Schwirplies; Andreas Ziegler
  2. Climate Trends and Farmers’ Perceptions of Climate Change in Zambia By Mulenga, Brian P.; Wineman, Ayala
  3. Bt Cotton and Ecosystem Impacts of Pesticide Reductions By Chellattan Veettil, Prakashan; Krishna, Vijesh V.; Qaim, Matin
  4. Why are firms that export cleaner? International trade, Abatement and Environmental Emissions By Forslid, Rikard; Okubo, Toshihiro; Ulltveit-Moe, Karen Helene
  5. A Least-Cost Assessment of the CO2 Mitigation Potential Using Renewable Energies in the Indian Electricity Supply Sector By Kumar, Subhash; Madlener, Reinhard
  6. Environmental Advocacy in the Obama Years By Nisbet, Matthew C
  7. Emissions Trading in the Presence of Price-Regulated Polluting Firms: How Costly Are Free Allowances? By Bruno Lanz; Sebastian Rausch
  8. The impact of a carbon tax on manufacturing: evidence from microdata By Ralf Martin; Laure B. de Preux; Ulrich J. Wagner
  9. The Perverse Impact of Calling for Energy Conservation By J. Scott Holladay; Michael Price; Marianne Wanamaker
  10. Understanding the adaptation deficit: why are poor countries more vulnerable to climate events than rich countries? By Samuel Fankhauser; Thomas K. J. McDermott
  11. Copenhagen: green economy leader report By Graham Floater; Philipp Rode; Dimitri Zenghelis
  12. Public concerns about transboundary haze: a comparison of Indonesia, Singapore, and Malaysia By Tim Forsyth
  13. The Potential and Constraints of the Exports of Environmental Goods (EGs): the case of Bangladesh By Md Rajibul Ahsan; Son Ngoc Chu
  14. Estimation of road traffic induced environmental pollutants based on a point-to-point traffic detection system By Mitsakis, Evangelos; Stamos, Iraklis; Basbas, Socrates; Aggelakis, Miron; Aifadopoulou, Georgia
  15. Assessing pricing assumptions for weather index insurance in a changing climate By Joseph D. Daron; David A. Stainforth
  16. “Sustainability” a semi-globalisable concept for international food marketing - Consumer expectations regarding sustainable food – An explorative survey in industrialised and emerging countries By von Meyer-Höfer, Marie; Spiller, Achim
  17. Cities chapter: better growth, better climate: the new climate economy report By [multiple or corporate authorship].
  18. Industry compensation under relocation risk: a firm-level analysis of the EU emissions trading scheme By Ralf Martin; Mirabelle Muuls; Laure B. de Preux; Ulrich J. Wagner
  19. The amenity value of English nature: a hedonic price approach By Stephen Gibbons; Susana Mourato; Guilherme Mendes Resende
  20. Knowledge spillovers from clean and dirty technologies By Antoine Dechezlepretre; Ralf Martin; Myra Mohnen
  21. Exploring the Potential of Mgnrega for the revitalization of Rainfed Agriculture in India By Kumar, Niteen
  22. Weather and Income: Lessons from the main European regions By García-León, David
  23. A review on climate change adaptation policies for the transportation sector By Stamos, Iraklis; Mitsakis, Evangelos
  24. ICT and environmental innovations in a complementary fashion. Is the joint adoption by firms economically visible? By Davide Antonioli; Grazia Cecere
  25. The Impact of Short Term Exposure to Ambient Air Pollution on Cognitive Performance and Human Capital Formation By Ebenstein, Avraham; Lavy, Victor; Roth, Sefi
  26. Stockholm: green economy leader report By Graham Floater; Philipp Rode; Dimitri Zenghelis
  27. The Harrington Paradox Squared By Coria, Jessica; Zhang, Xiao-Bing
  28. Fighting against drought in Dobrogea by protective forest belts By Lup, Aurel; Miron, Liliana
  29. Understanding and managing zoonotic risk in the new livestock industries By Marco Liverani; Jeff Waage; Tony Barnett; Dirk U. Pfeiffer; Jonathan Rushton; James W. Rudge; Michael E. Loevinsohn; Ian Scoones; Richard D. Smith; Ben S. Cooper; Lisa J. White; Shan Goh; Peter Horby; Brendan Wren; Ozan Gundogdu; Abigail Woods; Richard J. Coker
  30. The role of insurance in reducing direct risk: the case of flood insurance By Swenja Surminski
  31. Relaxing constraints as a conservation policy By Ben Groom; Charles Palmer
  32. Regulators as agents: modelling personality and power as evidence is brokered to support decisions on environmental risk By G.J. Davies; G. Kendall; E. Soane; J. Li; S.A. Rocks; S.R. Jude; S.J.T. Pollard
  33. A review of the literature on benefits, costs, and policies for wildlife management By Häggmark-Svensson, Tobias; Elofsson, Katarina; Engelmann, Marc; Gren, Ing-Marie
  34. CREP - Cattle Receiving Enhanced Pastures? Investigating Landowner Response to Federal Incentives By James Manley; Jason Mathias
  35. A social and ecological assessment of tropical land uses at multiple scales: the Sustainable amazon network By Toby A. Gardner; J. Ferreira; J. Barlow; A. C. Lees; L. Parry; I. C. G. Vieira; E. Berenguer; R. Abramovay; A. Aleixo; C. Andretti; L. E. O. C. Aragao; I. Araujo; W. S. de Avila; R. D. Bardgett; M. Batistella; R. A. Begotti; T. Beldini; D. E. de Blas; R. F. Braga; D. d. L. Braga; J. G. de Brito; P. B. de Camargo; F. Campos dos Santos; V. C. de Oliveira; A. C. N. Cordeiro; T. M. Cardoso; D. R. de Carvalho; S. A. Castelani; J. C. M. Chaul; C. E. Cerri; F. d. A. Costa; C. D. F. da Costa; E. Coudel; A. C. Coutinho; D. Cunha; A. D'Antona; J. Dezincourt; K. Dias-Silva; M. Durigan; J. C. D. M. Esquerdo; J. Feres; S. F. d. B. Ferraz; A. E. d. M. Ferreira; A. C. Fiorini; L. V. F. da Silva; F. S. Frazao; R. Garrett; A. d. S. Gomes; K. d. S. Goncalves; J. B. Guerrero; N. Hamada; R. M. Hughes; D. C. Igliori; E. d. C. Jesus; L. Juen; M. Junior; J. M. B. d. O. Junior; R. C. d. O. Junior; C. S. Junior; P. Kaufmann; V. Korasaki; C. G. Leal; R. Leitao; N. Lima; M. d. F. L. Almeida; R. Lourival; J. Louzada; R. M. Nally; S. Marchand; M. M. Maues; F. M. S. Moreira; C. Morsello; N. Moura; J. Nessimian; S. Nunes; V. H. F. Oliveira; R. Pardini; H. C. Pereira; P. S. Pompeu; C. R. Ribas; F. Rossetti; F. A. Schmidt; R. da Silva; R. C. V. M. da Silva; T. F. M. R. da Silva; J. Silveira; J. V. Siqueira; T. S. de Carvalho; R. R. C. Solar; N. S. H. Tancredi; J. R. Thomson; P. C. Torres; F. Z. Vaz-de-Mello; R. C. S. Veiga; A. Venturieri; C. Viana; Diana Weinhold; R. Zanetti; J. Zuanon
  36. Cities and the New Climate Economy: the transformative role of global urban growth By Graham Floater; Philipp Rode; Alexis Robert; Chris Kennedy; Dan Hoornweg; Roxana Slavcheva; Nick Godfrey
  37. Nuclear energy policy in Belgium after Fukushima By Pierre Louis Kunsch; Jean J. Friesewinkel
  38. Climate change and sustainable welfare: an argument for the centrality of human needs By Ian Gough
  39. Nether Lands: Evidence on the price and perception of rare flood disasters By Bosker, Maarten; Garretsen, Harry; Marlet, Gerard; van Woerkens, Clemens

  1. By: Claudia Schwirplies (University of Kassel); Andreas Ziegler (University of Kassel)
    Abstract: This paper contributes to the economic literature on pure and impure public goods by consid-ering two alternatives for contributing to the public good climate protection: compensating carbon emissions from conventional consumption or paying higher prices for climate-friendly products. We analytically and empirically examine a wide range of motives and their impact on individuals’ choice in favor of these two alternatives. Relying on data from representative surveys among more than 2000 participants from Germany and the USA, our results indicate that environmental awareness, warm glow motives, and the desire to set a good example sig-nificantly motivate the choice of both climate protection activities in both countries. However, some motives differ considerably between both alternatives and countries. A green identity enhances the willingness to pay a price premium for climate-friendly goods or services in Germany, while social norms seem to be of much higher relevance in the USA. Our results further suggest that the choice of climate protection activities, especially of carbon offsetting, entails a high degree of uncertainty.
    Keywords: Public good; climate change; climate protection; carbon offsetting; price premium
    JEL: H41 Q54 Q58
    Date: 2015
  2. By: Mulenga, Brian P.; Wineman, Ayala
    Abstract: Despite some overlap between farmers’ observations and climate patterns found in the meteorological records, the meteorological data do not support the perception that is an increase in intra-season variability in rainfall. Therefore, a complete picture of climate change requires contributions from multiple knowledge systems.
    Keywords: Zambia, climate change, Agricultural and Food Policy, Environmental Economics and Policy,
    Date: 2014–12
  3. By: Chellattan Veettil, Prakashan; Krishna, Vijesh V.; Qaim, Matin
    Abstract: This paper examines the ecosystem impacts of transgenic Bt cotton technology resulting from reduced chemical pesticide use. Employing unique panel data from smallholder farmers in central and southern India, negative environmental and health effects of pesticide use are quantified with the environmental impact quotient (EIQ), with and without Bt technology. An environmentally-sensitive production function is estimated, treating the environmental risk of pesticide toxicity as an undesirable output in the production process. Negative externalities are significantly lower in Bt than in conventional cotton. The reduction in EIQ through Bt adoption has increased from 39% during 2002-2004 to 68% during 2006-2008. Bt adoption also contributes to higher environmental efficiency. We find that environmental efficiency is influenced by the quality of Bt technology; high-quality Bt seeds are associated with higher environmental efficiency than lower-quality seeds.
    Keywords: Bt cotton, Directional distance function, Environmental impact quotient, India, Pesticide externality, Crop Production/Industries, Environmental Economics and Policy, Production Economics, Research and Development/Tech Change/Emerging Technologies, Resource /Energy Economics and Policy, D62, O44, Q12, Q16,
    Date: 2014–08
  4. By: Forslid, Rikard (Stockholm University and CEPR); Okubo, Toshihiro (Keio university); Ulltveit-Moe, Karen Helene (University of Oslo and CEPR)
    Abstract: This paper develops a theoretical model of trade and environmental emissions with heterogeneous firms, where firms make abatement investments and thereby affect their level of emissions. We show that investments in abatement are positively related to firm productivity and firm exports, while emission intensity is negatively related to firms' productivity and exports. The basic reason for these results is that a larger production scale supports more investments in abatement and, in turn, reduces emissions per output. We find that trade liberalization weeds out the least productive and dirtiest firms thereby shifting production away from relatively dirty low productive local firms to more productive and cleaner exporters. The overall effect of trade is therefore to reduce emissions. We test the empirical implications of the model on emission intensity, abatement and exporting using firm-level data from Sweden. The empirical results support our model.
    Keywords: Heterogeneous firms; environmental emissions; abatement; international trade
    JEL: F12 F14 F18 Q56
    Date: 2015–01–19
  5. By: Kumar, Subhash (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN)); Madlener, Reinhard (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))
    Abstract: The Indian power sector is experiencing a lot of pressure to supply sustainable electricity at affordable cost due to heavy demand especially in the summer peak season. Most of India’s electricity is produced by fossil fueled power plants, which are the source of CO2 emissions. In this case, renewable energy sources play a vital role in securing sustainable energy without environmental emissions. This paper examines the effects of renewable energy use in electricity supply systems and estimates the CO2 emissions by developing various scenarios under the least cost approach. The LEAP energy model is used to develop these scenarios. The results show that in an accelerated renewable energy technology (ARET) scenario, 23% of electricity is generated by renewables only, and 74% of CO2 reduction is possible by 2050. If the maximum energy savings potential is combined with the ARET scenario, the renewables share in electricity supply rises to 36% as compared to the reference scenario, while the CO2 emission reduction in this case remains at 74%.
    Keywords: CO2 mitigation; Electricity generation; LEAP; Least cost method; Renewables; India
    JEL: C70 P48 Q41 Q42
    Date: 2015–11
  6. By: Nisbet, Matthew C
    Abstract: In the latter years of Barack Obama?s presidency, the effort to mobilize public opinion and grassroots activism on climate change has led to a broader shift in environmental politics, as environmental organizations and their allies devote ever greater resources to shaping the outcome of elections, framing debates in stark moral terms, and melding innovative Internet-based strategies with traditional face-to-face field organizing. Yet, on the road to meaningfully dealing with climate change, this new brand of pressure politics as practiced by, NextGenClimate, and their allies among national environmental groups is not without its potential trade-offs, flaws and weaknesses. Blocking the Keystone XL oil pipeline and divesting from fossil fuel companies make for potent symbolic goals, but may detract from more important goals such as the passage of newfederal rules limiting emissions from coal fired power plants, and promoting government investment in a broad range of cleaner, more efficient energy technologies. Evidence also suggests that the strategies that environmental groups and climate advocates have used to mobilize a progressive base of voters and donors, may in fact be only strengthening political polarization, turning off core constituencies, dividing moderate and liberal Democrats, and promoting broader public disgust with ?Washington? and government
  7. By: Bruno Lanz; Sebastian Rausch
    Abstract: We study whether to auction or to freely distribute emissions allowances when some firms participating in emissions trading are subject to price regulation. We show that free allowances allocated to price-regulated firms effectively act as a subsidy to output, distort consumer choices, and generally induce higher output and emissions by price-regulated firms. This provides a cost-effectiveness argument for an auction-based allocation of allowances (or equivalently an emissions tax). For real-world economies such as the Unites States, in which about 20 percent of total carbon dioxide emissions are generated by price-regulated electricity producers, our quantitative analysis suggests that free allowances increase economy-wide welfare costs of the policy by 40-80 percent relative to an auction. Given large disparities in regional welfare impacts, we show that the inefficiencies are mainly driven by the emissions intensity of electricity producers in regions with a high degree of price regulation.
    Keywords: Tradable Pollution Permits; Climate policy; Auctioning; Free Allocation; Price Regulation; Electricity Generation.
    JEL: C6 D4 D5 Q4 Q5
    Date: 2015–01–26
  8. By: Ralf Martin; Laure B. de Preux; Ulrich J. Wagner
    Abstract: We estimate the impact of a carbon tax on manufacturing plants using panel data from the UK production census. Our identification strategy builds on the comparison of outcomes between plants subject to the full tax and plants that paid only 20% of the tax. Exploiting exogenous variation in eligibility for the tax discount, we find that the carbon tax had a strong negative impact on energy intensity and electricity use. No statistically significant impacts are found for employment, revenue or plant exit.
    Keywords: carbon tax; climate change levy; energy use; manufacturing; policy evaluation; UK
    JEL: D21 H23 Q41 Q48 Q54
    Date: 2014–09
  9. By: J. Scott Holladay (Department of Economics, University of Tennessee); Michael Price (Department of Economics, Georgia State University); Marianne Wanamaker (Department of Economics, University of Tennessee)
    Abstract: In periods of high energy demand, utilities frequently issue "emergency" appeals for conservation over peak hours to reduce brownout risk. We estimate the impact of such appeals using high-frequency data on actual and forecasted electricity generation, pollutant emission measures, and real-time prices. Our results suggest a perverse impact; while there is no significant reduction in grid stress over superpeak hours, such calls lead to increased off-peak generation, CO2 emissions, and price volatility. We postulate that consumer attempts at load shifting lead to this result.
    Keywords: Energy Demand, Air Pollution, Conservation, Media
    JEL: Q4 Q5 D8
    Date: 2014–10
  10. By: Samuel Fankhauser; Thomas K. J. McDermott
    Abstract: Poor countries are more heavily affected by extreme weather events and future climate change than rich countries. One of the reasons for this is the so-called adaptation deficit, that is, limits in the ability of poorer countries to adapt. This paper analyses the link between income and adaptation to climate events theoretically and empirically. We postulate that the adaptation deficit may be due to two factors: A demand effect, whereby the demand for the good “climate security” increases with income, and an efficiency effect, which works as a spill-over externality on the supply-side: Adaptation productivity in high-income countries is enhanced because of factors like better public services and stronger institutions. Using panel data from the Munich Re natural catastrophe database we find strong evidence for a demand effect for adaptation to two climate-related extreme events, tropical cyclones and floods. Evidence on the efficiency effect is more equivocal. There are some indications that adaptation in rich countries might be more efficient, but the evidence is far from conclusive. The implication for research is that better data, in particular on adaptation effort, need to be collected to understand adaptation efficiency. In terms of policy, we conclude that inclusive growth policies (which boost adaptation demand) should be an important component of international efforts to close the adaptation deficit.
    Keywords: climate change; adaptation; development; extreme events; disaster risk
    JEL: O11 O13 Q54 Q56
    Date: 2014–07
  11. By: Graham Floater; Philipp Rode; Dimitri Zenghelis
    Abstract: Copenhagen is widely recognised as a leader in the global green economy. The Copenhagen region accounts for almost 40% of Denmark’s output and has enjoyed long-term stable growth. At a national level, Danish GDP per capita is ranked among the top 10 countries in the world. At the same time, the city’s growth has been delivered while improving environmental performance and transitioning to a low-carbon economy. This new report, which we have produced in partnership with the City of Copenhagen, shows that the city continues to build on its pioneering success. Copenhagen has set itself the ambitious target to be carbon neutral by 2025, and the report looks at the challenges and opportunities involved in delivering this transformative agenda. Featuring a wealth of new research findings, the report shows how Copenhagen’s success is underpinned by a strong combination of the city’s green growth drivers. A number of these drivers rank among the best in Europe and the world, including the city’s compact urban form, strong innovation, high skills and employment, low carbon emissions, and improved environmental quality. Energy and resource effectiveness and low carbon drivers are central to Copenhagen’s carbon-neutral goal, and will require substantial additional policy support, particularly in the areas of district heating, energy efficiency, waste management and decarbonising the transport sector. The report also examines the challenges that Copenhagen will face in maintaining its position as a green economy leader internationally. Copenhagen remains one of the most productive cities in Europe, with gross value added exceeding US $83,000 per worker in 2010. However, over the last decade, income and investment levels in other OECD countries and cities have been closing the gap with Denmark. Drawing on the city’s strengths as an innovation-led economy will be key.
    JEL: J1
    Date: 2014–05
  12. By: Tim Forsyth
    Abstract: Public concerns about environmental problems create narrative structures that influence policy by allocating roles of blame, responsibility, and appropriate behavior. This paper presents an analysis of public concerns about transboundary haze resulting from forest fires in Indonesia, Singapore, and Malaysia for crises experienced in 1997, 2005 and 2013. The source of the information is content analysis of 2231 articles from representative newspapers in each country. The study shows that newspaper reporting about haze has changed from a discussion of the potential health and economic impacts of fires resulting partly naturally from El Niño-induced droughts, toward an increasing vilification of Indonesia for not ratifying the 2002 Association of South East Asian Nations (ASEAN) Agreement on Transboundary Haze Pollution; plus criticism of Singaporean and Malaysian companies investing in palm oil plantations, and ASEAN. Attention to climate change and potential biodiversity loss linked to haze, however, remains low. The paper argues that newspaper analysis of public concerns, despite political influences on the press, offers insights into how public criticism is voiced in these countries, and how perceived responsibility for action is changing.
    Keywords: ASEAN; forest fires; haze; palm oil; public understandings of risk; Southeast Asia
    JEL: N0
    Date: 2014–03
  13. By: Md Rajibul Ahsan; Son Ngoc Chu
    Abstract: Although the economic importance of environmental goods (EGs) is on a rise with increasing focus on global climate change issues, it is surprising that export growth of environmental goods is witnessing a downward trend in developing countries compared to developed countries. Researchers are divided over explanations for possible reasons: while some argue that lack of technological availability and insufficiency of the technology transfer isolate developing countries from the world market; others contend that country-specific ‘behind the border’ constraints prevent these countries from fully exploiting their export potential. This paper examines the potentials and constraints for Bangladesh EGs exports by applying a stochastic frontier gravity type model. The estimation results show that Bangladesh remained far from reaching its export potential during 2001 and 2007 despite there being an increased level of realization with the East Asian economies. The results also suggest that reducing ‘explicit beyond the border’ constraints by partner countries aided Bangladesh in attaining positive export growth between 2001 and 2007.
    Keywords: Environmental goods, Bangladesh, ‘behind the border’ constraints, ‘beyond the border’ constraints, stochastic frontier gravity model
    JEL: Q56
    Date: 2014
  14. By: Mitsakis, Evangelos; Stamos, Iraklis; Basbas, Socrates; Aggelakis, Miron; Aifadopoulou, Georgia
    Abstract: This paper aims at the estimation of road traffic induced environmental pollutants for the city of Thessaloniki, based on travel time detections of a point-to-point detection system. The hourly and daily pollutant emissions (NOx, CO, HC) and fuel consumption (FC) were estimated based on the COPERT model and include hot emissions of passengers’ cars circulating in high hierarchy links of the transport network. The system detections (travel time) were correlated based on each path’s length, in order to determine the average vehicle speed per analyzed time interval, which was the main determinant for calculating traffic induced emissions. The paper concludes with a sensitivity analysis based on link capacity and the prevailing traffic flow characteristics for optimally determining the vehicle speed and flow that minimize environmental pollutants.
    Keywords: traffic induced pollutants point-to-point detection system environmental modeling
    JEL: R40 R41
    Date: 2014
  15. By: Joseph D. Daron; David A. Stainforth
    Abstract: Weather index insurance is being offered to low-income farmers in developing countries as an alternative to traditional multi-peril crop insurance. There is widespread support for index insurance as a means of climate change adaptation but whether or not these products are themselves resilient to climate change has not been well studied. Given climate variability and climate change, an over-reliance on historical climate observations to guide the design of such products can result in premiums which mislead policyholders and insurers alike, about the magnitude of underlying risks. Here, a method to incorporate different sources of climate data into the product design phase is presented. Bayesian Networks are constructed to demonstrate how insurers can assess the product viability from a climate perspective, using past observations and simulations of future climate. Sensitivity analyses illustrate the dependence of pricing decisions on both the choice of information, and the method for incorporating such data. The methods and their sensitivities are illustrated using a case study analysing the provision of index-based crop insurance in Kolhapur, India. We expose the benefits and limitations of the Bayesian Network approach, weather index insurance as an adaptation measure and climate simulations as a source of quantitative predictive information. Current climate model output is shown to be of limited value and difficult to use by index insurance practitioners. The method presented, however, is shown to be an effective tool for testing pricing assumptions and could feasibly be employed in the future to incorporate multiple sources of climate data.
    Keywords: Climate modeling; Uncertainty; Bayesian Networks; Adaptation; India
    JEL: J1 N0
    Date: 2014
  16. By: von Meyer-Höfer, Marie; Spiller, Achim
    Abstract: Today’s global food production and consumption often stand in sharp contrast to the objectives of sustainable development. Sustainable food products, characterised by higher environmental or ethical standards than conventional equivalents, are therefore an essential mean of addressing this global challenge. However, to ensure uptake of these products it is crucial for agri-food market actors to understand consumer expectations regarding sustainable food, so they can appropriately tailor their differentiation and communication strategies. To explore these consumer expectations, data from an online survey in three industrialised and three emerging countries is used. The results show that consumers around the globe have quite diverse expectations regarding sustainable food products. Only very few attributes such as “environmental friendly production”,“no chemical pesticides”, “naturalness” and “safety” can be used to meet a range of international consumers’ expectations regarding sustainable food. International food marketers should thus try to get to know their consumers in each country better and learn how to address them specifically, i.e., by semi-global marketing strategies.
    Keywords: sustainable food consumption, consumer expectations, international marketing, semiglobalisation, Environmental Economics and Policy, Institutional and Behavioral Economics, Q13, Q18,
    Date: 2014–08
  17. By: [multiple or corporate authorship].
    JEL: N0
    Date: 2014–11
  18. By: Ralf Martin; Mirabelle Muuls; Laure B. de Preux; Ulrich J. Wagner
    Abstract: When regulated firms are offered compensation to prevent them from relocating, efficiency requires that payments be distributed across firms so as to equalize marginal relocation probabilities, weighted by the damage caused by relocation. We formalize this fundamental economic logic and apply it to analyzing compensation rules proposed under the EU Emissions Trading Scheme, where emission permits are allocated free of charge to carbon intensive and trade exposed industries. We show that this practice results in substantial overcompensation for given carbon leakage risk. Efficient permit allocation reduces the aggregate risk of job loss by more than half without increasing aggregate compensation.
    JEL: H23 Q52 Q53 Q54 Q58
    Date: 2014–08
  19. By: Stephen Gibbons; Susana Mourato; Guilherme Mendes Resende
    Abstract: Using a hedonic property price approach,we estimate the amenity value associated with proximity to habitats, designated areas, domestic gardens and other natural amenities in England. There is a long tradition of studies looking at the effect of environmental amenities and disamenities on property prices. But, to our knowledge, this is the first nationwide study of the value of proximity to a large number of natural amenities in England. We analysed 1 million housing transactions over 1996–2008 and considered a large number of environmental characteristics. Results reveal that the effects of many of these environmental variables are highly statistically significant, and are quite large in economic magnitude. Gardens, green space and areas of water within the census ward all attract a considerable positive price premium. There is also a strong positive effect from freshwater and flood plain locations, broadleaved woodland, coniferous woodland and enclosed farmland. Increasing distance to natural amenities such as rivers, National Parks and National Trust sites is unambiguously associated with a fall in house prices. Our preferred regression specifications control for unobserved labour market and other geographical factors using Travel to Work Area fixed effects, and the estimates are fairly insensitive to changes in specification and sample. This provides some reassurance that the hedonic price results provide a useful representation of the values attached to proximity to environmental amenities in England. Overall, we conclude that the housing market in England reveals substantial amenity value attached to a number of habitats, designations, private gardens and local environmental amenities.
    Keywords: amenity value; hedonic price method (HPM); environmental amenities
    JEL: R14 J01 F3 G3
    Date: 2014–02–01
  20. By: Antoine Dechezlepretre; Ralf Martin; Myra Mohnen
    Abstract: How much should governments subsidize the development of new clean technologies? We use patent citation data to investigate the relative intensity of knowledge spillovers in clean and dirty technologies in two technological fields: energy production and transportation. We introduce a new methodology that takes into account the whole history of patent citations to capture the indirect knowledge spillovers generated by patents. We find that conditional on a wide range of potential confounding factors clean patents receive on average 43% more citations than dirty patents. Knowledge spillovers from clean technologies are comparable in scale to those observed in the IT sector. The radical novelty of clean technologies relative to more incremental dirty inventions seems to account for their superiority. Our results can support public support for clean R&D. They also suggest that green policies might be able to boost economic growth through induced knowledge spillovers.
    Keywords: Innovation spill-overs; Climate Change; Growth; Patents; Clean technology; Optimal climate policy
    JEL: H23 O30 O54 O55 Q58
    Date: 2014–09
  21. By: Kumar, Niteen
    Abstract: Though MGNREGA happens to be an employment generation program at its core; initially encompassing activities under different heads to provide employment to the village communities; it has casted its potential towards rejuvenating rainfed agriculture along with short and long term environmental benefits. Within this context the present study sheds light on the intensity and distribution of works under different heads pertaining to revitalization of rainfed production systems i.e. water conservation and water harvesting, renovation of traditional water bodies and drought proofing for the year 2012-13. The study shows that with majority of the rainfed areas confined to five major states and primarily falling under semi-arid conditions, activities under MGNREGA with emphasis on watershed development and soil moisture conservation have appeared to be a potent tool to deal with the prolonged crisis of water scarcity in rainfed agriculture.
    Keywords: MGNREGA, Rainfed Agriculture, Water Conservation, Water Harvesting, Drought Proofing
    JEL: Q10
    Date: 2015–01–24
  22. By: García-León, David
    Abstract: Some recent papers by Dell et al. (2009) and Dell et al. (2012) (DJO) relating weather and economic outcomes, have delivered meaningful messages with clear implications to the effects of a changing climate. In a nutshell, the authors claim that a 1°C increase in global average temperatures would harm both the level and growth capacities of relatively poor countries, leaving rich countries basically unaffected. In this study, we make use of a detailed weather and economic dataset covering the main regions of the five largest economies in the Euro area in an attempt to refute the previous affirmation. In particular, we find in our sample that global warming affects, although in a modest manner, all regions within well-developed countries in the long-term (level effect). As in DJO, the level effect in poor regions is exacerbated. The latter regions also suffer from a slight negative short-term effect (growth effect). We claim also that the larger short-time response of these regions to a climate shock is partially adapted in the long-run.
    Keywords: economic growth, weather, Ricardian analysis, developed economies, climate change, adaptation, NUTS
    JEL: O1 O4 Q51 Q54 Q59 R11
    Date: 2015–01
  23. By: Stamos, Iraklis; Mitsakis, Evangelos
    Abstract: Climate change related disasters and extreme weather events are expected to significantly increase the risk of damages on networks, systems and assets. In view of these anticipated adverse effects, growing attention is placed on adaptation measures, in the form of preventive actions aiming to minimize induced hazards’ negative impacts and to enhance the cross-sectorial resilience. The transportation sector is no stranger to this regime. Within this paper, a detailed desktop, literature and case-study review approach is adopted in order to identify transport-related adaptation measures and actions that are taken at a global and European level. Findings from national and international activities, along with relevant policies and strategies stemming from relevant organizations (IPCC, Bridging the Gap, etc.) are reviewed in terms of their hitherto and expected contribution in efficiently addressing climate change. In addition, proposed actions are clustered in terms of content (technical measures, ICT, legislative, etc.). In this way, the transferability and applicability of case-specific experiences throughout the world are highlighted through the consolidation of a common knowledge base regarding adaptation measures in the transportation sector. Findings are formulated in the form of an adaptation toolbox that can provide the basis for an improved decision making approach for different end-user for addressing climate change.
    Keywords: climate change adaptation transport systems
    JEL: R40
    Date: 2014–10–08
  24. By: Davide Antonioli (Dipartimento di Economia e Management, Via Voltapaletto 11, Ferrara, Italy.); Grazia Cecere (Telecom Ecole de Management, Institut Mines-Telecom d Author-Name: Massimiliano Mazzanti)
    Abstract: We analyse how the joint adoption of ICT practices and environmental innovation affect the labour productivity of firms. We study complementarity in innovation adoption, with respect to the specific research hypotheses that the higher thediffusion and radicalness of ICT and EI, the higher might firm\rquote s productivitybe. As ICT are considered to be able to reduce the environmental footprint of different economics activities. We exploit original survey data which cover manufacturing firms for a dense SME area in the North-East of Italy (Emilia-Romagna region). We originally merge innovation survey data over 2006-2008 with firm\rquote s balance sheets over 2010-2011 to achieve this aim.The empirical evidence shows that for Emilia-Romagna manufacturing firms there are still wide margins for improving ICT-EIs integration in order to exploit their potential benefits on firm economic performance. However, the awareness of specific synergies seems to mainly characterizethe heavy polluting firms, subject to ETS schemes, while for the remaining firms prevalently emerge some substitutabilityrelations between ICT and EI. The latter firms are strategically less capable of exploiting the potential synergies between ICT and EI.
    Keywords: ICT, environmental innovation, adoption, SME, polluting sectors, Porter hypothesis, complementarity, labor productivity.
    JEL: D22 L23 L25 L60 M15
    Date: 2014–06
  25. By: Ebenstein, Avraham; Lavy, Victor; Roth, Sefi
    Abstract: Cognitive performance is critical to productivity in many occupations and potentially linked to pollution exposure. We evaluate this potentially important relationship by estimating the effect of pollution exposure on standardized test scores among Israeli high school high-stakes tests (2000-2002). Since students take multiple exams on multiple days in the same location after each grade, we can adopt a fixed effects strategy estimating models with city, school, and student fixed effects. We focus on fine particulate matter (PM2.5) and carbon monoxide (CO), which are considered to be two of the most dangerous forms of air pollution. We find that while PM2.5 and CO levels are only weakly correlated with each other, both exhibit a robust negative relationship with test scores. We also find that PM2.5, which is thought to be particularly damaging for asthmatics, has a larger negative impact on groups with higher rates of asthma. For CO, which affects neurological functioning, the effect is more homogenous across demographic groups. Furthermore, we find that exposure to either pollutant is associated with a significant decline in the probability of not receiving a Bagrut certificate, which is required for college entrance in Israel. The results suggest that the gain from improving air quality may be underestimated by a narrow focus on health impacts. Insofar as air pollution may lead to reduced cognitive performance, the consequences of pollution may be relevant for a variety of everyday activities that require mental acuity. Moreover, by temporarily lowering the productivity of human capital, high pollution levels lead to allocative inefficiency as students with lower human capital are assigned a higher rank than their more qualified peers. This may lead to inefficient allocation of workers across occupations, and possibly a less productive workforce.
    Date: 2014–12
  26. By: Graham Floater; Philipp Rode; Dimitri Zenghelis
    Abstract: Stockholm is a leading city for green economic growth. Despite the global downturn, the city’s low carbon economy remains highly competitive and well positioned for driving sustained growth in the medium to long term. This report, produced in partnership with the City of Stockholm, shows that Stockholm took early action to build a green economy – unlike most cities, environmental policies have been important to Stockholm for over 40 years. At the same time, early infrastructure investment such as building the city’s metro system in the 1950s, and development of district heating following the 1970s oil shocks has helped to build today’s lower carbon economy. Featuring a wealth of new research findings, the report shows how Stockholm benefits from a low-carbon energy system, a relatively compact centre with good public transport and an innovation-led economy for developing smart city solutions and export markets of the future. The report also examines the challenges that Stockholm faces in maintaining its position as a green economy leader internationally. The city’s ambitious goal to become fossil fuel free by 2050 will require strong policy action in the heating and transport sectors to avoid the long-term lock-in of high carbon infrastructure, systems and technology. The benefits of developing a dedicated clean-tech business cluster, alongside the smart innovation districts at Hammarby and Royal Seaport, are also examined. Produced by the Economics of Green Cities Programme at the London School of Economics and Political Science in partnership with the City of Stockholm.
    JEL: J1
    Date: 2013–06
  27. By: Coria, Jessica (Department of Economics, School of Business, Economics and Law, Göteborg University); Zhang, Xiao-Bing (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: Harrington (1988) shows that state-dependent enforcement based on past compliance records provides an explanation to the seemingly contradictory observation that firms' compliance with environmental regulations is high despite the fact that inspections occur infrequently and fines are rare and small. This result has been labeled in the literature as the "Harrington paradox". In this paper we propose an improved transition structure for the audit framework where targeting is based not only on firms' past compliance record but also on adoption of environmentally superior technologies. We show that this transition structure would not only foster the adoption of new technology but also increase deterrence by changing the composition of firms in the industry toward an increased fraction of cleaner firms that pollute and violate less.<p>
    Keywords: imperfect compliance; state-dependent targeted enforcement; technology adoption; emission standards
    JEL: K31 K42 L51 Q55
    Date: 2015–01
  28. By: Lup, Aurel; Miron, Liliana
    Abstract: Dobrogea province is composed by Constanta and Tulcea counties, situated in the South-eastern part of Romania, and it is known as one of the driest parts of Romania. The yearly amount of precipitations is no more than 400-450 mm. The yearly average temperature is around 10.5oC; the soils are of good quality but the main factor limiting the crops is, in this case, the lack of the water. During 1949 and 1955, studies were carried out concerning the damages produced by drought and the influence of the forest plantations for protective purposes on crops. Consequently, there have been planted protective forests on a few thousand hectares in the southern part of Constanta county but which were insufficient in order to protect all the agricultural lands. Because of the uncertainty surrounding the rehabilitation of the irrigation systems in the near future in Dobrogea, several projects were made in order to set up protective forest plantations. These projects include 70 localities and there have already been planted protective forests in some of them. The width of these forests is 10 m, the planting scheme is 2 x 1 m, and the distance between them is variable, by the case. The locust tree is the used species.
    Keywords: drought, damage, forest belt
    JEL: Q10 Q15 Q23 Q25
    Date: 2014–11–20
  29. By: Marco Liverani; Jeff Waage; Tony Barnett; Dirk U. Pfeiffer; Jonathan Rushton; James W. Rudge; Michael E. Loevinsohn; Ian Scoones; Richard D. Smith; Ben S. Cooper; Lisa J. White; Shan Goh; Peter Horby; Brendan Wren; Ozan Gundogdu; Abigail Woods; Richard J. Coker
    Abstract: Background: In many parts of the world, livestock production is undergoing a process of rapid intensification. The health implications of this development are uncertain. Intensification creates cheaper products, allowing more people to access animal-based foods. However, some practices associated with intensification may contribute to zoonotic disease emergence and spread, for example the sustained use of antibiotics, concentration of animals in confined units, and long distance and frequent movement of livestock. Objectives: This paper reviews the diverse range of ecological, biological, and socio-economic factors likely to enhance or reduce zoonotic risk, and identifies why improved understanding requires an interdisciplinary approach. A conceptual framework is then offered to guide systematic research on this problem. Discussion: We recommend that interdisciplinary work on zoonotic risk should be able to account for the complexity of risk environments, rather than simple linear causal relations between risk drivers and disease emergence and/or spread. Further, we recommend that interdisciplinary integration is needed at different levels of analysis, from the study of risk environments to the identification of policy options for risk management. Conclusion: Given rapid changes in livestock production systems in developing countries and their potential health implications at the local and global level, the problem we analyse here is of great importance for environmental health and development. While we offer a systematic interdisciplinary approach to understand and address these implications, we recognise that further research is needed to clarify methodological and practical questions arising from the integration of the natural and social sciences.
    Keywords: integrated ecology and human health; emerging diseases; livestock production; risk characterization; risk management; zoonoses
    JEL: G32
    Date: 2013–08
  30. By: Swenja Surminski
    Abstract: The provision of flood insurance is a patchwork, with countries showing varying degrees of penetration, coverage types, demand levels, and design structures. This article explores the current understanding of flood insurance with a specific focus on the ability of flood insurance to contribute to direct risk reduction. The starting point is a consideration of the existing provision of flood insurance, both in established insurance markets and in developing countries. A review of efforts to analyse and explain the use and design of flood insurance highlights how the understanding of supply and demand determinants is steadily growing, while clear gaps also emerge. Particularly the question of utilizing flood insurance in the context of climate change and as a lever for physical risk reduction would benefit from further empirical and theoretical analysis. The article concludes with a reflection on current efforts to reform and design flood insurance and offers some pointers for future research.
    Keywords: Flood insurance; Disaster risk reduction; Flood risk management; Insurance; Climate change; Natural hazards; Adaptation
    JEL: N0
    Date: 2014–12–18
  31. By: Ben Groom; Charles Palmer
    Abstract: Eco-entrepreneurs in developing countries are often subject to market or institutional constraints such as missing markets. Conservation interventions which relax constraints may be both cost effective and poverty reducing. A simulation using data from an intervention in Madagascar to relax the technological constraints of forest honey production investigates this possibility. Cost-effectively achieving dual environment-development goals is shown to depend on the severity of constraints, relative prices, along with the nature and efficiency in use of technology. Success is more likely for technologies exhibiting close to constant returns to scale or high-input complementarity. Forest honey does not meet these requirements. Ultimately, where market or institutional constraints are present, knowledge of the recipient technology is required for more informed, efficient and perhaps more politically acceptable conservation policy.
    JEL: J1
    Date: 2014–08–01
  32. By: G.J. Davies; G. Kendall; E. Soane; J. Li; S.A. Rocks; S.R. Jude; S.J.T. Pollard
    Abstract: Complex regulatory decisions about risk rely on the brokering of evidence between providers and recipients, and involve personality and power relationships that influence the confidence that recipients may place in the sufficiency of evidence and, therefore, the decision outcome. We explore these relationships in an agent-based model; drawing on concepts from environmental risk science, decision psychology and computer simulation. A two-agent model that accounts for the sufficiency of evidence is applied to decisions about salt intake, animal carcass disposal and radioactive waste. A dynamic version of the model assigned personality traits to agents, to explore their receptivity to evidence. Agents with ‘aggressor’ personality sets were most able to imbue fellow agents with enhanced receptivity (with ‘avoider’ personality sets less so) and clear confidence in the sufficiency of evidence. In a dynamic version of the model, when both recipient and provider were assigned the ‘aggressor’ personality set, this resulted in 10 successful evidence submissions in 71 days, compared with 96 days when both agents were assigned the ‘avoider’ personality set. These insights suggest implications for improving the efficiency and quality of regulatory decision making by understanding the role of personality and power.
    Keywords: risk; agent; regulation; power; personality; model
    JEL: G32
    Date: 2014–01
  33. By: Häggmark-Svensson, Tobias (Department of Economics, Swedish University of Agricultural Sciences); Elofsson, Katarina (Department of Economics, Swedish University of Agricultural Sciences); Engelmann, Marc (Department of Economics, Swedish University of Agricultural Sciences); Gren, Ing-Marie (Department of Economics, Swedish University of Agricultural Sciences)
    Abstract: Wildlife management is a source of conflict in many countries because of the asymmetric allocation of benefits and costs among stakeholders. A review of studies on benefits, costs, and policies shows most valuation studies estimate recreational values of hunting, which can range between 13 and 545 USD/hunting day (in 2013 prices). A majority of the studies on costs calculate losses from livestock predation and crop destruction, and show that they can correspond to 40% of profits in the agricultural sector in wildlife rich regions in the US. Most of the studies are carried out for animals in developed economies, in particular in the US. This is in contrast to studies on costs of wildlife, which to a large extent are born by farmers neighboring national parks in developing and emerging economies. However, a common feature of both valuation and cost studies is the exclusion of several costs and benefits items and of indirect effects in the economies, which can be considerable for economies with high reliance on tourism and agriculture sectors. With respect to policy choice, the literature suggests economic incentives for conflict resolutions, where the winners from wildlife compensate the losses, but studies evaluating such policies in practice are lacking.
    Keywords: costs; benefits; policies; wildlife; review
    JEL: Q29 Q57
    Date: 2015–01–21
  34. By: James Manley (Department of Economics, Towson University); Jason Mathias (City of Baltimore)
    Abstract: Using enrollment data on the enhanced CRP's river buffer subprogram from 1998 to 2010 we find that participation incentives are larger for cattle pasture and that enrollments increase at a higher rate in counties with large amounts of cattle ranching. Counties producing cattle receive almost twice as much in up-front incentives, and the marginal effect of that incentive is also higher. This is probably due to the fact that cattle ranchers can use heavily subsidized "cost share" funding to improve their ranches. Accounting for the cattle effect also helps explain previous findings of apparent producer preference for up-front payments over a discounted stream of annual benefits. This preference is replicated but disappears when we control for cattle production.
    Keywords: Agricultural Economics, Agricultural Policy, Conservation Reserve Enhancement Program, Conservation Reserve Program, Landowner Incentives, Subsidy Response, Cattle Ranching.
    JEL: H23 Q15 Q24 Q58
    Date: 2015–01
  35. By: Toby A. Gardner; J. Ferreira; J. Barlow; A. C. Lees; L. Parry; I. C. G. Vieira; E. Berenguer; R. Abramovay; A. Aleixo; C. Andretti; L. E. O. C. Aragao; I. Araujo; W. S. de Avila; R. D. Bardgett; M. Batistella; R. A. Begotti; T. Beldini; D. E. de Blas; R. F. Braga; D. d. L. Braga; J. G. de Brito; P. B. de Camargo; F. Campos dos Santos; V. C. de Oliveira; A. C. N. Cordeiro; T. M. Cardoso; D. R. de Carvalho; S. A. Castelani; J. C. M. Chaul; C. E. Cerri; F. d. A. Costa; C. D. F. da Costa; E. Coudel; A. C. Coutinho; D. Cunha; A. D'Antona; J. Dezincourt; K. Dias-Silva; M. Durigan; J. C. D. M. Esquerdo; J. Feres; S. F. d. B. Ferraz; A. E. d. M. Ferreira; A. C. Fiorini; L. V. F. da Silva; F. S. Frazao; R. Garrett; A. d. S. Gomes; K. d. S. Goncalves; J. B. Guerrero; N. Hamada; R. M. Hughes; D. C. Igliori; E. d. C. Jesus; L. Juen; M. Junior; J. M. B. d. O. Junior; R. C. d. O. Junior; C. S. Junior; P. Kaufmann; V. Korasaki; C. G. Leal; R. Leitao; N. Lima; M. d. F. L. Almeida; R. Lourival; J. Louzada; R. M. Nally; S. Marchand; M. M. Maues; F. M. S. Moreira; C. Morsello; N. Moura; J. Nessimian; S. Nunes; V. H. F. Oliveira; R. Pardini; H. C. Pereira; P. S. Pompeu; C. R. Ribas; F. Rossetti; F. A. Schmidt; R. da Silva; R. C. V. M. da Silva; T. F. M. R. da Silva; J. Silveira; J. V. Siqueira; T. S. de Carvalho; R. R. C. Solar; N. S. H. Tancredi; J. R. Thomson; P. C. Torres; F. Z. Vaz-de-Mello; R. C. S. Veiga; A. Venturieri; C. Viana; Diana Weinhold; R. Zanetti; J. Zuanon
    Abstract: Science has a critical role to play in guiding more sustainable development trajectories. Here, we present the Sustainable Amazon Network (Rede Amazônia Sustentável, RAS): a multidisciplinary research initiative involving more than 30 partner organizations working to assess both social and ecological dimensions of land-use sustainability in eastern Brazilian Amazonia. The research approach adopted by RAS offers three advantages for addressing land-use sustainability problems: (i) the collection of synchronized and co-located ecological and socioeconomic data across broad gradients of past and present human use; (ii) a nested sampling design to aid comparison of ecological and socioeconomic conditions associated with different land uses across local, landscape and regional scales; and (iii) a strong engagement with a wide variety of actors and non-research institutions. Here, we elaborate on these key features, and identify the ways in which RAS can help in highlighting those problems in most urgent need of attention, and in guiding improvements in land-use sustainability in Amazonia and elsewhere in the tropics. We also discuss some of the practical lessons, limitations and realities faced during the development of the RAS initiative so far.
    Keywords: interdisciplinary research; land use; social-ecological systems; sustainability; trade-offs; tropical forests
    JEL: Q15
    Date: 2013–06–05
  36. By: Graham Floater; Philipp Rode; Alexis Robert; Chris Kennedy; Dan Hoornweg; Roxana Slavcheva; Nick Godfrey
    Abstract: Urbanisation is one of the most important drivers of productivity and growth in the global economy. Between 2014 and 2050, the urban population is projected to increase by around 2.5 billion people, reaching 66% of the global population. By 2030, China’s cities alone will be home to nearly 1 billion people. India, Nigeria and Indonesia will also experience rapid population growth. If managed well, the potential benefits of this urban growth are substantial. The economic potential is driven by raised productivity resulting from the concentration of people and economic activities in cities that leads to a vibrant market and fertile environment for innovation in ideas, technologies and processes. Similarly, well-managed cities in high income countries could continue to concentrate national economic growth, through re-densification and the roll out of innovative infrastructure and technologies.
    JEL: R14 J01
    Date: 2014–11
  37. By: Pierre Louis Kunsch; Jean J. Friesewinkel
    Abstract: The Belgian nuclear phase-out law imposes closing down in the 2015-2025 period seven nuclear power plants (NPPs) producing more than 50% of the domestic electricity. This creates an urgent problem in the country because of the absence of well-defined capacity-replacement plans. Though a safety-of-supply provision in the law allows for a delayed phase-out, hopes for a technically acceptable schedule have reduced after the Fukushima nuclear disaster in March 2011. In this article policy investigations are made with system dynamics. A significant finding from such modelling is that, in contrast to common expectations, a too early nuclear phase-out will not serve the deployment of renewable energy sources and rational use of energy. It is indeed found to primarily benefit to fossil fuel, creating unwanted drawbacks regarding safety of supply, dependency on foreign suppliers, price volatility, and increased use of non-renewable and CO2-emitting fossil fuels. © 2013 Elsevier Ltd.
    Keywords: Nuclear energy; Renewable energy sources; System dynamics modelling
    Date: 2014–03
  38. By: Ian Gough
    Abstract: Since climate change threatens human wellbeing across the globe and into the future, we require a concept of wellbeing that encompasses an equivalent ambit. This paper argues that only a concept of human need can do the work required. It compares need theory with three alternative approaches. Preference satisfaction theory is criticised on the grounds of subjectivity, epistemic irrationality, endogenous and adaptive preferences, the limitlessness of wants, the absence of moral evaluation, and the non-specificity of future preferences. The happiness approach is found equally wanting. The main section shows how these deficiencies can be addressed by a coherent theory of need. Human needs are necessary preconditions to avoid serious harm, are universalisable, objective, empirically grounded, non-substitutable and satiable. They are broader than ‘material’ needs since a need for personal autonomy figures in all theoretical accounts. While needs are universal, need satisfiers are most often contextual and relative to institutions and cultures. The satiability and non-substitutability of needs is critical for understanding sustainability. The capability approaches of Sen and Nussbaum are compared but argued to be less fundamental. Finally, human needs provide the only concept that can ground moral obligations across global space and intergenerational time and thus operationalise ‘sustainable welfare’.
    Keywords: Human needs; welfare theory; wellbeing; global justice; intergenerational justice; sustainability; preferences; capabilities
    JEL: B5 I00 P46 Z13
    Date: 2014–07
  39. By: Bosker, Maarten; Garretsen, Harry; Marlet, Gerard; van Woerkens, Clemens
    Abstract: The Netherlands is one of the most flood prone countries in the world. It also has the best flood defenses in the world that are built to make floods an extremely rare event. This paper uses the unique Dutch setting to provide evidence on the price and perception of rare environmental disasters. In particular, it allows us to precisely identify whether houses in areas that would flood, in case the Dutch flood defenses fail, cost less than otherwise equal homes that do not run any risk. We do this using a border-discontinuity design that heavily relies on the (spatial) detail of our unique dataset covering every housing transaction over the period 1999-2011. Despite €1.1 billion publicly spent on flood protection each year, we find a 1% flood risk price discount on houses in flood prone areas. The median household living in a flood prone area would be willing to pay an additional €69 per year to be fully insured against flood risk. Our estimate implies that people’s perceived flood risk is substantially higher than the official protection levels at which the government claims to uphold the country’s flood defenses.
    Keywords: house prices; implicit insurance; rare flood disasters
    JEL: D8 Q54 R21
    Date: 2014–12

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